FTSE 100 opens on the front foot; GVC quids in as it raises profit guidance
FTSE 100 up 24 points
Fed minutes awaited
GVC rises after earnings upgrade
8.45am: FTSE 100 opens on the front foot
The FTSE 100 got off to a slightly better-than-expected start on Wednesday, rising 24 points to 7,168 shortly after the start of the session.
Leading the blue-chip risers in early trading was Just Eat PLC (LON:JE.), which was 3.1% higher at 645p, while the top faller was bookmaker Flutter Entertainment PLC (LON:FLTR) after it dropped 1.9% to 7,726p.
Flutters woes may have been down to a strong third-quarter performance from its FTSE 250 rival, Ladbrokes owner GVC Holdings PLC (LON:GVC), which nudged up its full-year profit guidance following what it said was a “positive start” to trading in the US.
Meanwhile, some traders will be keeping their powder dry ahead of the Fed minutes later today, with Markets.coms Neil Wilson saying the minutes could provide insight into the “level is discord” among the central banks monetary policy committee and where it is likely to go next.
“We know that market expectations are highly tilted towards a further [interest rate] cut in October, and eco data has of late been softer. The ISM figures that have come out since the meeting will support the case for cuts”, Wilson said.
He added that trade and Brexit may also provide the case for a rate cut alongside “general uncertainty around the global economy and trade”.
6.45am: FTSE 100 expected to open mostly flat
The FTSE 100 is expected to open mostly flat on Wednesday as hopes of a trade deal between the US and China began to fade ahead of talks between the two sides later this week.
Spread-better IG expects the FTSE 100 to open around 1 point lower after falling 55 points to 7,143 on Tuesday.
“The trade war between the US and China is taking a perilous political turn. If it comes down to an ideology clash, then the world should prepare for further disruptions in global trade”, said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
She added that if talks break down a consequence could be higher US tariffs on Chinese imports “by next week”, accompanied by a likely sell-off in global stocks.
The recent blacklisting by the US of several Chinese tech companies and officials of the Communist regimes treatment of Uighur Muslims in Xinjiang is unlikely to help matters.
The pessimism over trade drove US markets lower overnight, with the Dow ending Tuesday 1.19% lower while the S&P 500 fell 1.56% and the Nasdaq dropped 1.67%.
It was a similar picture in Asia today, with Japans Nikkei 225 down 0.64% and Hong Kongs Hang Seng 0.67% lower.
Away from trade, traders will also be scrutinising the minutes from the Federal Open Market Committees latest meeting for hints on any tweaks to US interest rate policy.
Fed president Jerome Powell said on Tuesday that the central bank would continue buying treasury bills to avoid a liquidity crunch in US money markets, while Ozkardeskaya said Powell had “left the door open” for more action on interest rates.
“Henceforth, a third consecutive rate cut is likely around the corner at the FOMCs October meeting”, she said, adding that activity on US treasury markets suggested an 81% chance of a 25 basis-point cut by the end of October.
On the currency markets, the pound seemed to have flattened out at US$1.2206 against the dollar as hoped of a Brexit deal before the end of the month seemed to have all but disappeared.
However, while there is a lingering prospect of a no-deal, legal blocks on exiting the EU without an agreement have many believing that an extension to the UKs EU membership is now almost inevitable, which could boost sterling in the short term.